Concerns that Greece and other struggling European nations may not be able to repay their debts are focusing investor attention on another big worry: Economies across the Continent have used complex financial transactions—sometimes in secret—to hide the true size of their debts and deficits.

Investors long turned a blind eye to European governments' aggressive bookkeeping, aimed at meeting the euro zone's fiscal ceilings. Countries using the euro currency have a rich history of exotic maneuvers aimed at meeting rules requiring members to cap debt levels at 60% of their gross domestic product and their annual budget deficits to no more than 3%. Despite criticism, European leaders deemed many of these moves acceptable as they sought the long-planned currency union...

...Portugal classified subsidies to the Lisbon subway and other state enterprises as equity purchases. After learning that, Eurostat made Portugal redo its accounting in 2002. The country revised its 2001 deficit from €2.76 billion, or 2.2% of GDP, to €5.09 billion, or 4.1%—well over the limit.

France arranged a deal with the soon-to-be privatized France Telecom in 1997 under which the company paid the government a lump sum of more than €5 billion. In return, France agreed to assume pension liabilities for France Telecom workers. The billions from France Telecom helped narrow France's budget gap to around €40 billion in 1997; it reported a deficit for that year of 3% of GDP—right on the target, and helping it to join the euro.

Even Germany, Europe's largest economy, tried to reappraise gold reserves for a fast fix in 1997, though it backed off after resistance from the country's central bank.

President Obama will call for new government power to regulate insurance-rate increases as part of comprehensive changes to the health-care system that the White House will unveil on its Web site Monday, senior officials said.

The proposal -- part of a package that a top official said will serve as a "starting point" for the bipartisan health summit Thursday -- comes as Obama has pointed to recent rate increases as evidence that his proposed changes are necessary.

Last week, Health and Human Services Secretary Kathleen Sebelius drew attention to a California health insurance company, Anthem Blue Cross, which planned rate increases of up to 39 percent. Obama mentioned the increases in his weekly radio address and at a town hall in Nevada.

The new proposal, which a White House official described Sunday night, would give Sebelius new authority to oversee, and potentially block, rate increases that are deemed unfair.

VH: I'm sure that this will work out like other price control schemes have since time immemorial---It will fail miserably. It will make insurance premiums even more unaffordable. You would think that all those Ivy league economists that buzz around the White House would have a clue.

Wednesday, February 24, 2010

LAS VEGAS — President Obama unveiled a $1.5 billion program to aid the states hardest hit by the foreclosure crisis, a small but targeted effort to address a housing problem that continues to resist government solutions.

The program, which administration officials called an "innovation fund," is modest in size and reach and comes as the administration's chief foreclosure-prevention program faces criticism for not doing more to help borrowers.

Speaking to the Las Vegas Chamber of Commerce, Obama said the program would allow states to find new ways to help struggling homeowners. "That means that here in Nevada, we're going to be able to prevent some foreclosures that otherwise would have happened," he said Friday afternoon. "The goal is to target communities at the center of the crisis and to empower local agencies that know these communities best."

Obama made the same promise at a town hall meeting earlier in the day, telling about 1,700 people in Henderson, a suburb near Las Vegas, that "government has a responsibility to help deal with this problem."

VH: Here we go again. The Federal government riding the white horse over the hill to "help" out distressed homeowners. So instead of letting these bad investments go quickly to bankruptcy and clearing out the housing market, we have a vain attempt to prop up a market that shows very little signs of improvement. I don't see how this helps people who, after this small injection of public funds, will most likely lose their homes because they can't find a job or the value of their homes are much lower than what they are shelling out each month in mortgage payments. The irony in all this is that it was the Federal government that led all of these poor people down this path of destruction by implementing all sorts of "affordable housing" incentives. If the Feds want affordable housing now and they want a quick recovery of the housing market, why not let prices drop to their equilibrium? Instead, we get more public funds thrown at lost causes.

An unapologetic Danny Williams says he was aware his trip to the United States for heart surgery earlier this month would spark outcry, but he concluded his personal health trumped any public fallout over the controversial decision.

In an interview with The Canadian Press, Williams said he went to Miami to have a "minimally invasive" surgery for an ailment first detected nearly a year ago, based on the advice of his doctors.

"This was my heart, my choice and my health," Williams said late Monday from his condominium in Sarasota, Fla.

"I did not sign away my right to get the best possible health care for myself when I entered politics."

The 60-year-old Williams said doctors detected a heart murmur last spring and told him that one of his heart valves wasn't closing properly, creating a leakage.

He said he was told at the time that the problem was "moderate" and that he should come back for a checkup in six months.

Eight months later, in December, his doctors told him the problem had become severe and urged him to get his valve repaired immediately or risk heart failure, he said.

His doctors in Canada presented him with two options - a full or partial sternotomy, both of which would've required breaking bones, he said.

He said he spoke with and provided his medical information to a leading cardiac surgeon in New Jersey who is also from Newfoundland and Labrador. He advised him to seek treatment at the Mount Sinai Medical Center in Miami.

VH: It's nice that Mr. Williams had the option to come to the U.S. for his treatment; he was wise not to sit and wait before it was too late. It must be comforting to have an option even if it means leaving your country.

Greek drivers lined up for gas at the few stations still open Friday as a customs strike against government austerity measures left many pumps running dry.

The fuel shortage was the first serious consequence of growing labor protests against the Socialist government's emergency spending cuts program, aimed at easing the debt crisis in Greece and shoring up market confidence.

Customs workers have extended their strike against salary freezes and bonus cuts through next Wednesday, when unions across Greece will hold a general strike that is set to bring the country to a standstill.

European finance ministers have told Athens it must demonstrate signs of fiscal improvement by March 16 or it will be ordered to impose even tougher budget cuts. Greece has promised to slash its deficit from an estimated 12.7 percent of gross domestic product to 8.7 percent this year.

Finance Ministry officials say they are under EU pressure to ax the public servants' so-called "14th salary." Greek workers get their annual salary divided into 14 payments, with two of them given as holiday bonuses, in a measure originally designed to alleviate those with low incomes.

"We would consider cutting the 14th (salary) to be an act of war," said Yiannis Papagopoulos, leader of Greece's trade union umbrella group, the GSEE.

VH: Aren't unions great? They would rather destroy their own country than to agree to austerity programs. This isn't the first time (or the last) that unions have held the public hostage and I'm not just talking about Greece either. The recent $60 billion giveaway to Big Labor for ObamaCare is still a fresh wound. In California, Big Labor rules. And they will crush anyone that gets in their way. Heck, they made mince meat and a lame duck of Arnold Schwchenneger when he tried to curb their power back in 2005. With a $20 billion fiscal hole that California needs to deal with, just wait until there has to be some real cutting of public services and jobs around here. All hell is going to break loose with public unions being at the head of the screaming mob.

Saturday, February 20, 2010

Who could forget the $5 billion in Obama administration stimulus money that was going to rapidly create nearly 90,000 green jobs across the country in these tough economic times and make so many thousands of homes all snuggy and warm and energy-efficient these very snowy days?

Well, a new report due out this morning will show the $5-billion program is so riddled with drafts that so far it's weatherized only about 9,000 homes.

Based on the initial Obama-Biden program promise that it would create 87,000 new jobs its first year, that would be about 10 jobs for each home weatherized so far. Makes for pretty crowded doorways.

Friday, February 19, 2010

Last year, two Detroit tavern owners were sitting at the bar, sampling their beverages and bemoaning the local economy -- no one in the city had cash, and when they did, they spent it in the suburbs. Then the pair hit on a solution: Print their own money.

It is, after all, perfectly legal for anyone to issue currency, as long as it doesn't look too much like a U.S. dollar. Thus was born the Detroit cheer, a local scrip accepted by a handful of city businesses, including a pizzeria, an electrician and a doggy day care center.

Residents can also exchange it at a few area bars for greenbacks, but the cheer is vastly more colorful. It features a chiseled, naked Greco-Roman superhero (the Spirit of Detroit) towering Godzilla-like over the city skyline, cupping a tiny family in one hand and a sunburst representing God in the other. He's a lot more fun than George Washington.

And Detroit isn't the only city sporting its own currency. Since the market tanked nearly 18 months ago, there's been an interest in local scrips not seen since the Great Depression.

VH: I find it interesting that this is another example of people having coordinated to create and use a viable currency without an over arching government authority. It's not the first time that this has happened and it won't be the last. Also, this all really says something about the general distrust of the Dollar and our governments profligate spending habit---people are really spooked and with good reason.

Tuesday, February 16, 2010

WASHINGTON — Social Security's annual surplus nearly evaporated in 2009 for the first time in 25 years as the recession led hundreds of thousands of workers to retire or claim disability.

The impact of the recession is likely to hit the giant retirement system even harder this year and next. The Congressional Budget Office had projected it would operate in the red in 2010 and 2011, but a deeper economic slump could make those losses larger than anticipated.

"Things are a little bit worse than had been expected," says Stephen Goss, chief actuary for the Social Security Administration. "Clearly, we're going to be negative for a year or two."

Since 1984, Social Security has raked in more in payroll taxes than it has paid in benefits, accumulating a $2.5 trillion trust fund. But because the government uses the trust fund to pay for other programs, tax increases, spending cuts or new borrowing will be required to make up the difference between taxes collected and benefits owed.

VH: Social Security turns citizens into wards of the state with all of the implications that this imposes---like the raiding of funds for use in other government programs and being held hostage to the whims of the political class who will change eligibility requirements and benefit amounts when they deem necessary. Politicians that have and continue to push for entitlement programs like Social Security, always fail to mention the downsides to such programs.

Lastly, I continue to be amazed at the amount of times that the government actuaries tend to be wrong in their long term projections. You would think that the American public would be more cynical about their projections.

Monday, February 15, 2010

Some top officials of a Nobel Prize-winning climate-science organization are acknowledging the panel made some mistakes amid a string of recent revelations questioning the accuracy of some of the information in its influential reports.

Officials of the Intergovernmental Panel on Climate Change, a United Nations-sponsored network of scientists whose reports strongly influence global policy on greenhouse-gas emissions, initially played down some of the allegations. Increasingly, however, they are acknowledging the panel's mistakes and saying it needs to tighten its procedures.

VH: Since the IPCC is used by AGW advocates as a "scientific" international agency that legitimizes their position and which is used as justification to steer policy (re: billions of American taxpayer dollars) towards mitigating "climate change," one would hope that their reporting should be held to a higher standard. Apparently not.

Prof Jones stepped down as director of the University of East Anglia’s climate change unit in December after leaked emails appeared to show academics were manipulating data to bolster claims that global warming is caused by humans.

Now the academic has admitted he may have lost track of some of the data used to produce the famous “hockey stick” graph, which uses climate readings from worldwide weather stations to show a sharp rise in global temperatures.

The Climate Research Unit formerly headed by Prof Jones is responsible for analysing data from hundreds of weather stations to produce "evidence" of global warming which is used by the UN's Intergovernmental Panel on Climate Change.

Prof Jones also admitted that his own lack of organisation had contributed to his reluctance to share crucial data with climate change sceptics, but denied that he deliberately distorted the evidence.

According to a 2004 paper by British geographer and climatologist Nigel Arnell, global warming would likely reduce the world's total number of people living in "water-stressed watersheds"—that is, areas with less than 1,000 cubic meters of water resources per capita, per year—even though many regions would see increased water shortages. Using multiple models, Mr. Arnell predicted that if temperatures rise, between 867 million and 4.5 billion people around the world could see increased "water stress" by 2085. But Mr. Arnell also found that "water stress" could decrease for between 1.7 billion and 6 billion people. Taking the average of the two ranges, that means that with global warming, nearly 2.7 billion people could see greater water shortages—but 3.85 billion could see fewer of them.

The IPCC's much-shorter "Summary for Policy Makers" is even more one-sided. It is riddled with warnings of warming-induced drought and—while acknowledging that a hotter Earth would bring "increased water availability" in some areas—warns that rising temperatures would leave "hundreds of millions of people exposed to increased water stress." Nowhere does it specify that even more people would probably have more water supplies.

VH: After reading the article, who can believe that the IPCC is even handed in its treatment of climate issues? The IPCC is essentially a mouth piece for AGW advocates.

Sunday, February 7, 2010

The American scientist who produced the "hockey stick graph" showing a sharp rise in global warming was largely cleared of misconduct by an academic investigation today.

The board of inquiry at Pennsylvania State University said it found no evidence that Michael Mann, a leading climatologist, had suppressed or falsified data, tried to destroy data or emails, or misused information. It will convene a second panel to investigate whether he had violated academic practices, including those governing exchanges between scholars.

VH: Note that this does not mean that Mann's "Hockey Stick" was proven to be scientifically correct as it was implied in this CBS story. Secondly, is anyone surprised that a Penn State panel exonerated Mann? Thirdly, this does not mean data was not suppressed at all by someone.

Dutch environment ministry spokesman Trimo Vallaart has asked the U.N.'s climate change panel to rethink its assertion that more than half of the Netherlands is below seal level. Dutch authorities explain that, in fact, only 26 percent of the country is below sea level.

...correcting the error had been "on the agenda several times" but had never actually happened. Vallaart told the AFP that he regretted the fact that proper procedure was not followed, adding that it should not be left to politicians to check the IPCC's numbers.

Wednesday, February 3, 2010

Aside from not trusting administration officials on their estimates, the big question that should be on everyone's mind is what happens when the stimulus funds are withdrawn? Eventually they will. What happens then? We will be left with a massive fiscal hangover, I bet.

One thing is for certain: The first jobs tally, which showed 640,000 jobs were created, contained numerous errors. After that October report, the administration changed the criteria for counting stimulus-funded jobs. The goal was to make it simpler for recipients to accurately report headcounts.

Recipients no longer have to determine whether a job was "created" or "saved" by stimulus funds, only that it was "funded" by the Recovery Act. Also, the reports only track jobs on a quarterly basis instead of keeping a running total.

Even with these changes, it's still a challenge to determine exactly how many jobs stimulus has funded, experts said. It will come as no surprise if more mistakes are found.

Also, the little piggies that are benefiting from feeding at the public trough are going to squeal once it comes time to wean:

Gov. Deval Patrick, a Democrat, touted stimulus' impact on the alternative energy sector, saying the state will increase wind power 10-fold and solar power 15-fold by next year. The number of solar companies has quadrupled and their employment doubled.

It's an environmental catch-22. California needs to meet its aggressive goals for renewable-energy production, but solar and wind farms require lots of space. The farms' land gobbling can conflict with one of Californians' most cherished values: the preservation of pristine wilderness and animal habitat. As the state gets serious about increasing its renewable-energy portfolio, there's going to be tension.

California Sen. Dianne Feinstein is learning that the hard way. As the author of the 1994 California Desert Protection Act (which established the wildly popular Joshua Tree National Park), she was the natural author for the California Desert Protection Act of 2010. The bill would place nearly 1 million acres of the Mojave Desert off limits for development.

It would also fund a new renewable-energy permitting office and seek to expedite permitting for renewable-energy projects on lands deemed more suitable for development, but those changes seem like small potatoes when compared to the vast amount of land that will suddenly be off limits. The Bureau of Land Management is currently evaluating about 120 solar and wind projects in the region, and a handful of those would have to be tossed out under Feinstein's bill. The developers are crying foul.

VH: The "green" utopia is going to be a lot more elusive and expensive than what environmentalist's have sold to the gullible California public. The state of California is already one of the most expensive places to live and to do business. What do you think is going to happen when more land is set aside from being developed and there are less and less corridors to carry power from one point to the next? Cha-ching.